Libyan revolutionary fighters say they have entered the southern city of Bani Walid, where they encountered heavy resistance from forces loyal to former leader Moammar Gadhafi.

Officials from Libya's National Transitional Council Sunday said its troops were in the town center, but the report could not be verified. Earlier in the day, NTC forces launched a new assault on the desert city, 170 kilometers southeast of Tripoli.

Bani Walid is surrounded by provisional government fighters, but their commanders pulled them back last week after suffering heavy loses. The city and Mr. Gadhafi's hometown of Sirte are the only two remaining bastions in Libya still resisting NTC rule.

In Sirte, returning residents are accusing provisional government forces of demolishing and looting homes, shops and public buildings to take revenge on the strategic coastal city's support for Mr. Gadhafi.

Trucks could be seen carting off tractors, industrial generators and heavy machinery on the road to nearby Misrata, which was under siege by loyalist forces for months and saw some of the fiercest fighting of the war.

Smaller pickups were loaded with rugs, freezers, refrigerators, furniture and other household goods, apparently taken by civilians and fighters to be used in their homes or resold.

Several Sirte residents said the looting has made them bitter toward the revolution that ended Mr. Gadhafi's 42-year rule. They found nearly every house and building either damaged by a rocket or mortar, burned out or riddled with bullets.

The looting is a sign that reconciliation and unity may be difficult to achieve in Libya's post-Gadhafi era.

NTC officials have said Sirte's capture would allow them to declare the country liberated. Battles still rage in a small area of the city where pro-Gadhafi loyalists are hemmed in.

Also Sunday, Libyans using bulldozers began to demolish the walls around Mr. Gadhafi's main Tripoli complex. NTC fighters overran the sprawling Bab al-Aziziyah compound in August. Many Gadhafi opponents see the walled encampment, which covers six square kilometers, as a glaring symbol of the former leader's autocratic rule.

Mr. Gadhafi's whereabouts still are unknown. The International Criminal Court at The Hague has issued a warrant for his arrest on charges of crimes against humanity.

The interim government is leading the country until democratic elections are held.